Is Glenn Beck sponsor Goldline cheating consumers?

Unlike Auric Goldfinger, Glenn Beck doesn't appear to know gold (or Goldline, for that matter) as well as he thinks he does. (Photo Credit: CC BY-ND/BullionVault/Flickr)

A ubiquitous part of Glenn Beck’s programming is his endorsement of the gold vendor Goldline. Recent concerns over the value of the U.S. dollar have prompted many to turn their attention toward the market for gold, and Beck and Goldline have been eager to capitalize. However, as blogs like Mediaite and The Big Picture report, Goldline International is currently under legal investigation for its business practices. Glenn Beck may not be part of the investigation, according to the Los Angeles District Attorney’s office, but Fox News does not appreciate there being yet another problem with a sponsor of “The Glenn Beck Show.”

Understanding why the law is upset with Goldline

For a brief period of time – long before Goldline came into existence – the United States based its monetary system on a gold standard. Such a system of commodity money has its limitations, but fiscal conservatives praise the gold standard for its ability to place a government on a leash by limiting the potential for chronic deficit spending. Such people tend to believe Glenn Beck when he predicts that the U.S. dollar will collapse and says that buying gold is the only way to avoid economic gloom and doom. Conveniently, Beck gives his endorsement to Goldline, a company that, according to the Los Angeles District Attorney, is selling gold at overly inflated prices. Congressmen like New York Rep. Anthony Weiner and House Commerce Subcommittee Chairman Bobby Rush have taken a particular interest in the DA’s investigation of Goldline.

Where the DA claims Goldline has been dishonest

The Los Angeles DA claims that Goldline “grossly overcharges” for its coins. The Big Picture notes that markup on average is “90 percent above the melt value of the coin” and 47 percent higher than the competition, while one coin was valued by Goldline at 208 percent above melt value. Selling coins as high as twice that of melt value does not constitute a good investment for consumers, as the price of gold would have to double before a consumer could break even. Moreover, the DA takes issue with the claim some Goldline salespeople have made that they can give gold investment advice, but because they are not licensed investment advisers, Goldline salespeople cannot legally make that claim.

Rep. Anthony Weiner has heard enough

Anthony Weiner, who sits on the House Subcommittee on Commerce, Trade and Consumer Protection, has contacted the SEC and FTC regarding Goldline’s practices. He has proposed legislation that would require companies like Goldline to reveal their full business plan to consumers, markup included. Hearings on the matter will be held later this summer, according to The Big Picture.

In a public statement, Anthony Weiner said that “Goldline rips off consumers, uses misleading and possibly illegal sales tactics, and deliberately manipulates public fears of an impending government takeover – this is a trifecta of terrible business practices.” If Congress believes that Goldline is intentionally exploiting the public, self-proclaimed “rodeo clown” Glenn Beck will be forced to drop another sponsor.